Market Commentary

The financial sector has evolved over the years with new technologies being introduced in the industry. In Kenya competition on who comes up with the next best application is changing our view of banks.

Equity bank is the largest bank in Kenya by customer deposits and the best bank in the world in terms of return on assets. Its success came from strategy to go for the bottom of the pyramid. The greatest threat to equity Bank is poor customer service, but it still is a strong investment destination

For the longest time the Kenyan banks have been the port of call for investors; they were profitable, resilient, and stable and the price gains were attractive. This was especially true for the 6 leading banks. However, for the last three years it seems the fellowship of the gold standard has been haunted by new demons. Have the Kenyan banks lost their shine?

Interestingly, there are some foreign investors who are waiting for the market to bottom out so they can take full advantage of the bear. Well, Africans only slaughter when the visitors come, so let them. But make sure you are in when the meat is being distributed.

Equity Bank Group operates in five geographical markets: Kenya, Uganda, South Sudan, Rwanda and Tanzania. Its intrinsic value ranges between KES 49.46 to of KES 55.32. Its achievements, leadership and strategies continue to propel it as a bank worth investing in

Inflation has increased for the ninth straight month in July, bringing renewed pressure on the Central bank to tighten its monetary policy. Inflation may slow to between 8 percent and 9 percent by the end of the year if the central bank raises rates, while failure to tighten monetary policy may keep the inflation rate above 12 percent.

Brief Company Profile

Market Segment: Main Investment SegmentSector: Banking

KCB Group Limited registered as a non-operating holding company with effect from January 1, 2016. The holding company oversees KCB Bank Kenya - incorporated on January 1, 2016 - and all KCB’s regional units in Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia. It also owns KCB Insurance Agency, KCB Capital, KCB Foundation and all associate companies. The bank provides corporate and retail banking services across the East Africa region and is currently present in all the 47 counties of Kenya. The company operates its business through the following segments: Retail Banking, Corporate Banking, Mortgages, Treasury and Other Group. The Retail Banking segment provides services such as customer current accounts, savings and fixed deposits to individuals. The Corporate Banking segment offers services such as current accounts, fixed deposits, overdrafts, loans and other credit facilities both in local and foreign currencies. The Mortgages segment engages in the provision of mortgage finance through KCB S&L. The Other Group segment comprises trade finance and forex business activities.

KCB Group Limited is listed on the banking sector of the Nairobi Securities Exchange and is a constituent company of the NSE 20 share index. The Company is cross listed in the Dar-es-salaam, Uganda and Rwanda Stock Exchanges. This is strategic in accessing unrestricted capital in the region. KCB’s strength lies in its corporate services focusing on supporting existing value chains and clusters that contribute positively to the total Risk weighted Assets. The bank has the largest asset base in the region at half a Trillion Kenya Shillings which makes it superior compared to it's peers and can easily access capital subsequently. The wide asset base enables it to leverage on the possible consolidation of the Banking Sector due to the increased capital requrements. The bank's customers include retail, corporate, SME's and Government (both county government and National Government).